Government Doubles Import Duty on Wheat to 20 Percent

The government doubled the import duty on wheat to 20 percent to curb cheap shipments and give positive price signal to farmers in the ongoing Rabi season.

It also imposed an import duty of 50 percent on peas to check cheaper shipments from countries like Canada.

The Central Board of Excise and Customs (CBEC) in a notification said that it seeks “to (i) increase rate of basic customs duty on Peas, (Pisum sativum) from present Nil rate to 50%. (ii) increase rate of basic customs duty on wheat from 10% to 20%.”

In March, the government had imposed 10 percent import duty on wheat to contain sharp fall in local prices in view of a bumper crop of 98.38 million tonnes in 2016-17 crop year (July-June).

As farmers have started planting of rabi (winter) wheat crop, the government wants to give positive price signal and encourage farmers to grow wheat in more area.

The government does not want wheat growers to follow the way of pulses farmers who shifted to other crops this kharif season as prices remained low just before the sowing period owing to a bumper crop last year.

India produced a record 22 million tonnes of pulses in 2016-17 crop year which led to a fall in domestic prices, even below the MSP.

Moreover, the country also imported about 5 million tonnes of pulses last fiscal.

The import duty on peas has been imposed to curb shipments and boost domestic prices.

Recently, the government had also imposed quantitative restrictions on the import of other pulses like tur.